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DUBAI, June 16 (Reuters) - Moderate cleric Hassan Rohani won Iran's presidential election on Saturday with a resounding defeat of conservative hardliners, calling it a victory of moderation over extremism and pledging a new tone of respect in international affairs.

Though thousands of jubilant Iranians poured onto the streets in celebration of the victory, the outcome will not soon transform Iran's tense relations with the West, resolve the row over its nuclear programme or lessen its support of Syria's president in the civil war there - matters of national security that remain the domain of Supreme Leader Ayatollah Ali Khamenei.

But the president runs the economy and wields broad influence in decision-making in other spheres. Rohani's resounding mandate could provide latitude for a diplomatic thaw with the West and more social freedoms at home after eight years of belligerence and repression under President Mahmoud Ahmadinejad, who was legally barred from seeking a third consecutive term.

"This victory is a victory of wisdom, a victory of moderation, a victory of growth and awareness and a victory of commitment over extremism and ill-temper," Rohani told state television, promising to work for all Iranians, including the hardline so-called "Principlists" whom he defeated at the poll.

"I warmly shake the hands of all moderates, reformists and Principlists," he said.

The mid-ranking cleric seemed to strike a new tone in the way he talked about Iran's relations with the rest of the world.

Rohani said there was a new chance "in the international arena" for "those who truly respect democracy and cooperation and free negotiation".

Celebrating crowds sprang up near Rohani's headquarters in downtown Tehran and across the city and country as his victory was confirmed.

"LONG LIVE REFORM!"

"Long live reform! Long live Rohani!" chanted the throngs, according to witnesses at the scene. "Ahmadi, bye bye!" they added in reference to Ahmadinejad, the witnesses said.

"Tehran has exploded with happiness. I have never seen so many people so happy in my life," said Negin, a 29-year-old photographer.

Others flashed the victory sign and chanted slogans in favour of Mirhossein Mousavi, who reformist supporters believe was robbed of the 2009 election by what they say was vote rigging to return Ahmadinejad to office.

Another eyewitness named Mina told Reuters tearfully by phone: "I haven't been this happy in four years. I feel that we finally managed to achieve a part of what we have been fighting for since the past elections. They finally respected our vote. This is a victory for reforms and all of us as reformists."

Rohani will take up the presidency, the highest elected office in Iran's hybrid clerical-republican system, in August.

Several people were killed and hundreds detained when security forces crushed protests after the 2009 election, and Mousavi and his fellow reformist candidate are still being held under house arrest. Authorities say the election was free and fair.

BRIDGE-BUILDER?

Though an establishment figure, Rohani was known for his nuanced, conciliatory approach when he was Iran's chief nuclear negotiator.

He could act as a bridge-builder between hardliners around Khamenei who reject any accommodation with the West and reformers marginalised for the last four years who argue that the Islamic Republic needs to be more pragmatic in its relations with the world and modernise at home in order to survive.

Emphasising political continuity, Khamenei congratulated both the people of Iran for the high turnout in the polls and Rohani for his electoral success.

"The true winner of yesterday's election is the great nation of Iran that was able to take a firm step with God's help," Fars news agency quoted Khamenei as saying.

But Rohani's wide margin of victory revealed a large reservoir of support for reform with many voters, undaunted by restrictions on candidate choice and campaign rallies, seizing the chance to rebuke the unelected elite over Iran's economic miseries, international isolation and security crackdowns.

Rohani's nearest rival was conservative Tehran Mayor Mohammad Baqer Qalibaf, a long way behind with less than 16 percent. Other hardline candidates close to Khamenei, including current nuclear negotiator Saeed Jalili, scored even lower.

Iran's rial strengthened about 4 percent against the U.S. dollar on Saturday after partial vote tallies pointed to an easy Rohani victory, web sites tracking the currency said.

Washington said it stood ready to engage with Iran to reach a "diplomatic solution" over its nuclear programme, which the West suspects is intended to produce nuclear weapons - something Iran denies.

"We respect the vote of the Iranian people and congratulate them for their participation in the political process, and their courage in making their voices heard," the White House said in a statement.

"It is our hope that the Iranian government will heed the will of the Iranian people and make responsible choices that create a better future for all Iranians."

It's really late, but I really wanted to respond to this! I'll probably flesh out my thoughts in a later post when I'm more awake.

I don't know much about Iranian politics, but I think it's a good thing that the Supreme Leader has let this election run its course to whatever end. The new president won't have complete control over executive power, but he is still a reflection of the people's will and I think the political elites understand that.

I think Iran is kinda shifty with its neighbours and unsure about its future, especially with economic sanctions. While electing a moderate president doesn't change its situation off the bat, perhaps a different approach to its foreign policy can make Iran and those it doesn't get along with calmer with each other. We can extend this to the people too. Rohani as president should equal the end of protests. Maybe he'll allow more freedoms and less government intervention in society, and that should quell a lot of discontent. The real holders of executive power, once having public anger quieted should be able to continue to achieve their foreign policy goals.

So I think Rohani will get everybody off of each other's backs, but I'm not sure if that'll lead to big or little change.

Sounds promising...but they've also just pledged 4000 Revolutionary Guards to support Bashar Assad. And as most comment articles I've read have noted, he has no real power. All the power still lies with Supreme Leader Ayatollah Ali Khamenei - he practically froze Ahmedinejad out when he stepped out of line, and he'll dictate foreign policy (no doubt including the nuclear program's main aims).

Although we can't really begrudge Iran too much for supporting Assad. The US has just aligned itself with Sunni Islam - the "foes" of Iran etc. and they'll be worried about the instability in the region. There's an element of opportunism too - they've waited until it's started to look like Assad's winning before offering help.

Well, it's better that the moderate candidate won than the hardliners. He's got no real power to deal with the biggest things like the nuclear program, although he's pledged to be more transparent about it. Maybe he has enough power to lighten the burden on regular Iranian people. Maybe. It's really hard to feel optimistic about countries ruled by religious groups.

Nothing will change. These things need to happen for there to be any change: Khamenei needs to be done away with, the supreme leader position needs to be done away with, the "revolutionary" guard needs to be done away with, and Islamic fundamentalism needs to be done away with.

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